Woolworths Supermarkets Digital Business Report Business Essay
Could you help me write a business analysis report about giving assistance to Woolworths Supermarket (Woolworths) to provide a strategy on how they can prepare and compete with Amazon appropriately as their external consultant? Thank you very much!!!
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2020 Digital Business
Scenario: Amazon is Disrupting Major Supermarkets
As a major player in the digital business space, Amazon has recently decided to enter into the Australian grocery market to compete with Woolworths and Coles. This is mainly done through a reduction in price to undercut the big supermarket chains.
Some key facts and figures are presented below:
•Amazon Australia is now undercutting the dominant supermarket chains by as much as 50 per cent on household staples and quickly capturing a foothold in the market
•Some products are priced lower to consumers than the supermarket’s purchase price
•Supermarket giants are worried that brand owners are favouring Amazon as they can offer lower prices to customers (perhaps offering Amazon better terms)
•Selling to Amazon at cheaper prices could adversely impact brands (pricing control and favour with major supermarkets)
•Amazon has less than 1% of the online food and grocery market, which grew 39.7% over last 12 months (Nielsen 2018)
•Amazon.com.au now has more than 2500 food and grocery products on its site
Your task
To adequately compete with Amazon and ensure that they do not take up too much market share, you have been hired as an external consultant by Woolworths to provide a strategy on how they can prepare and compete with Amazon appropriately. Provided below are several internal and external issues that Woolworths are grappling with that need to be solved. These are outlined below:
•Worried shareholders: Shareholders are worried about Amazon’s rise as they see this as a threat to Woolworth’s share price
•Poor online customer service: Woolworths customers have been complaining that when they try and order their groceries online (website and mobile) they can’t sufficiently ask questions and engage with staff members for advice and/or enquiries
•Social media ineptitude: Woolworths are worried that their social media interactions are insufficient and unengaging and that consumers do not have any desire to interact with the brand
•Corporate staff insufficiently trained: The company has identified that not all their staff members are sure of how the online grocery ordering system works. This also extends to payment by suppliers
•Price: Woolworths are unable to compete with Amazon on prices of particular products
•Website not so user-friendly: Amazon’s online ordering system is much more user-friendly than Woolworths
•Distribution: Woolworths has more effective distribution channels than Amazon already set-up in Australia but feel that Amazon is starting to make strong moves in this space. Not only that, but costs for the different buying channels for consumers is higher than simply operating online
•Supplier relationships: Some suppliers are willing to offer Amazon better terms than Woolworths
•Brand reputation: Woolworths has noticed that their reputation is decreasing, and Amazon’s is increasing here in Australia
•Poor consumer loyalty: Consumer loyalty is difficult to establish in the FMCG market and while Woolworths has a large market share, consumers don’t seem to be particularly loyal
As highlighted above, Woolworths have a number of worrying issues they need to deal with and that they see as a threat from Amazon. To assist Woolworths, you need to select 2 issues and develop innovative solutions to dealing with these issues.
What does your solution look like?
•Your solution needs to be innovative and draw on material and theory learned throughout the semester (e.g., we discuss the new consumer decision-making process... how can Woolworths use this?)
•Your solution needs to be a step-by-step implementation guide with control measures highlighted along the process (control refers to different evaluative tools)
•You need to consider costs and timeline (include a realistic budget based on evidence and a timeline of key activities)
•Who in Woolworths should be implementing your solution (their role only...not their name)? Consider if a new role needs to be created, what would this look like?
•Your solution needs to be based on evidence from both business and academic sources. In saying this, if you have a completely innovative solution to a problem that has not been thought of before, then this will be considered
What will you be marked on?
•Two chosen issues and two solutions (one solution to one issue): Each solution is clearly and specifically stated. The solution is logically linked to the problem and is innovative.
•Implementation and control: A thorough and specific implementation plan is clearly identified for every solution.
•Digital business theory: There is a clear integration of relevant digital business theory in solutions (i.e. systems thinking).
•Sources of evidence: High-quality, credible, relevant sources to develop ideas that are appropriate for the development of solutions.
•Writing style: Language is clear and expressive showing a strong writing style and without grammar, punctuation, usage, and spelling errors.
Other instructions
You have a short word count which means you do not need to include an executive summary, introduction or conclusion. Instead, your focus needs to be on solutions and how you can best present this to Woolworths’ executives.
Report Rubric
Woolworths Supermarkets Digital Business Report
By (Name)
Name of the Class (Course)
Professor (Tutor)
Name of the University
Date
Woolworths Supermarkets Digital Business Report
Introduction
Woolworths Group has the leading chain store supermarkets in Australia. The Company hosts 995 stores across Australia, which has employed more than 115,000 employees in the stores, support offices, and distribution centers. Furthermore, Woolworths is committed to excellent customer services, a range of products, convenience, and value (Woolworths.com, 2020). The Company works closely with farmers and growers across Australia to ensure that they provide the best products in society. As of 2019, Woolworths has managed to source 95% of fresh fruits, vegetables, and meat products from Australian farmers. Furthermore, the Company has integrated e-commerce in its business operations. Customers can now access a wide range of products at the comfort of their computers at home using the Woolworths Supermarket App. Groceries and other products are then delivered in their homes within 2 hours (Woolworths.com, 2020). However, the entry of Amazon in the Australian online Market has become a tremendous competitive challenge to Woolworths Supermarkets. The purpose of this paper is to provide a report on how Woolworths Supermarkets to remain competitive in the Australian Market.
Overview of Amazon.com
Amazon.com is an American multinational company based in Seattle, Washington, that offers a conglomerate of E-commerce products and services. Amazon.com was founded by the current CEO Jeff Bezos and went online in July 1995. The Company has grown from bookselling to a wide range of services such as Cookware, Music CDs, Toys, Games, and Hardware (Amazon.com, 2020). The Company is committed to customer obsession, passion for invention, long-term thinking, and operational excellence. Amazon Australia has come with a competitive advantage with a wide range of these custom products and services since its entry in the Australian Market in December 2017. For instance, Amazon is undercutting Woolworths Supermarkets with approximately 50% on household goods, which makes it possible for its Australian market entry. Furthermore, Amazon is providing some consumer goods at a lower price compared to Woolworths. This has shifted some customers who consider Amazon products (Amazon.com, 2020). In 2018, Amazon had almost 14,500 sellers who listed products for sale on Amazon Australia. With an average of 9 products posted for sale, it is no doubt that the Australian marketplace is offering much hope for future Amazon growth.
Problem identification
Woolworths needs to adequately compete with Amazon.com so that it can retain its Market and save its growth strategies in the future. For this to be possible, Woolworth's needs to identify key internal and external issues that need to be improved to compete favorably. However, the Company has a competitive advantage in the Australian Market. For instance, Woolworths enjoys more than 50% of the food and grocery market compared to Amazon's 39.7% (Woolworths.com, 2020). Woolworths. As a result of Amazon's entry in the Australian Market, Woolworths Supermarkets has identified several key issues that need to be solved. These issues vary from stakeholders, marketing, and technology, and customer satisfaction. However, to immediately maintain the competition, Woolworths has decided to work on two key issues;
1 Poor online customer service.
2 Woolworth's website is not so user friendly.
The new consumer decision-making process
According to Wang, Y. and Yu, C. (2017, 181), the new consumer decision making process theory involves problem recognition, information search, evaluation of alternatives, purchase, and post-purchase evaluation. Problem recognition requires the identification of the exact needs of customers. Information search will request Woolworths to search for information through online search engines and by engaging some customers to provide customer experience as well as recommendations. In the case of Woolworth, we searched for valuable information about online customer satisfaction and making web services user friendly. Additionally, the evaluation of alternatives involves the consideration of providing other online services (Wang, Y. and Yu, C, 2017, 184). Woolworth is considering improving customer satisfaction through the provision of different products like clothing and furniture. The next step involved the purchase of the products based on emotions, experience, and marketing campaigns available. Finally, Woolworth's experts conducted a post-purchase analysis based on whether the product the customers bought satisfied their needs.
Woolworths Supermarket has differentiated themselves through their value proposition. The Company has ventured into the technology environment by offering self-service checkouts and online shopping for a variety of food and grocery products. Customers can do this through the Company's mobile app and website services. These services appeal to the social-cultural forces such as the elderly who might not make it to their stores. Furthermore, Woolworth's online services provide a wide range of services, such as meal planning, recipes, and gift cards to their customers (Zhang, X., 2018, 53). However, with the entry of Amazon in Australia, the Company has received several complaints related to their service delivery. Most of the customers say that they are unable to engage with the Company's staff members. Others have referred to Amazon by saying that they offer better customer services compared to them. As a result of this, Woolworths has decided to come up with some changes that will improve their customers' online interaction.
Solutions
Continuous staff training and creation of online management team
Based on the problems identified, there is a need for Woolworths Supermarkets to improve online customer services through training of their employees on how to handle customer needs (Nwankwo, S., Gbadamosi, A. and Gbadamosi, T., 2010, 66). After training seven employees on managing online tools and communication skills, there was some improvement in customer experience. We conducted a test by asking our customers about our online services, and five out of ten responded positively. This shows that one of the causes of the poor online services was insufficiently trained staff. As a result of this study, the Company should set aside some financial resources for training its personnel. Furthermore...
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